The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980s. Abdelhafidh 2014 investigated the effect of external debt on economic growth for tunisia during 19702010, and found that external debt affects economic growth both in the short and longrun. Impact of external debt on economic growth in nigeria. Nigeria is confronted with the issue of limited capital and has to resort to foreign debt in order to augment domestic savings, balance of payment deficits, and shortfall in revenue which induce continuous raise in the debt stock at an alarming rate. The impact of government debt on the economic growth of ghana. External debt and economic growth journal of economic integration. It, therefore, becomes necessary to highlight the monetary policy in nigeria. Ajide1 this paper investigates the role of frazer economic freedom index on fdi growth relationship over the period spanning 1980 through 2010 using annual time series data. The result showed that the variables are stationary at first differencing. This paper is intended to examine the domestic debteconomic nexus in nigeria during such a fairly long time period as 1980 to 2015. A priori expectation was that external debt would bring about economic growth. That the public debt stocks have positive impact on the economic growth of nigeria.
The effect of external debt on economic growth of nigeria, largest undergraduate projects repository, research works and materials. This study investigates the effect of the external debt burden on economic growth and development of nigeria. Macroeconomic determinants of economic growth in nigeria. This research work was aimed at ascertaining the impact of external debt on economic growth in nigeria. Determinants of economic growth in nigeria kazeem b. Evidence from nigeria hope ifeoma orjinta department of accountancy, faculty of management sciences, chukwuemeka odumegwu ojukwu university, igbariam campus, anambra state. Research question the following question will form the basis of this investigation. Impact of external debt on nigeria economy project. Such problems include high unemployment rate, low investment, high rate of inflation and unstable foreign exchange rate. Limitations in the course of carrying out this study, some problems were encountered which ranges from non availability of relevant recent data to the paucity of available ones. Scope the study is designed to cover the period of 1992 2004 and concentrates only on the external debt in nigeria and also economic growth.
Impact of external debt on economic growth in nigeria by idris idris musa a thesis submitted to othman yeop abdullah graduate school of business universiti utara malaysia in partial fulfillment of the requirement for the degree of master of economics. Debt relief is an agreement by a creditor of an indebted firm or country to accept reduced or postponed interest and. External debt, public investment, and growth in lowincome. This has informed the need to embark on the present study with a view to investigating the impact of. Time series data on external debt stock and external debt service was used to capture external debt burden. Malaysia what do these what do these countries have in countries have in common. Over emphasis on negative impact of debt will cause morbid fear of debt, resulting in debt avoidance when it would have stimulated the economy by bringing in the much needed capital for infrastructural development and investment. Pdf effect of external debt on economic growth of nigeria. The debt crisis if not well managed will lead to liquidity crisis and foreign exchange crisis, which will retard the rate of economic growth and development in nigeria.
Analysis of the impact of external debt on economic growth. External debt relief a nd economic growth in nigeria. An overview of the nigerian economic growth and development. If government does not want to compromise macroeconomic stability by printing more money and government.
This paper uses a structural vector autoregression generalized economic growth model augmented with a debt variable to characterize the dynamic impact of innovations to external public debttogdp ratio on per capita gdp growth, investment, trade openness, exchange rate and inflation in nigeria over the period 19702014. External debt, economic growth and investment in nigeria 1. Challenges to economic growth in nigeria michael amati jose ardavin jeanette fershtman 14 may 2004. The paper questions the extent to which domestic debt empirically impactt on economic growth in nigeria between 1981 to 2012. Effects of public external debt and private investment on agricultural growth in nigeria. This has informed the need to embark on the present study with a view to investigating the impact of external debt on economic growth of nigeria. An empirical analysis of east african countries halima ibrahim x506723420 a research paper submitted in partial fulfilment of the requirements for the award of a degree of master of arts economics, university of nairobi. Foreign debt management and the development of nigeria. There have been several attempts to empirically assess the effect of external debt on economic growth. External debt relief a nd economic growth in nigeria m.
Investment, gdp growth, and the size of gdp are all strongly interdependent. As discussed in section 1, the results are inconclusive. The effect of foreign debt on the economic growth of nigeria. It draws on quantitative research methodological framework and specifically employs the ordinary least square regression ols technique to investigate the relationship between gross domestic product, interest rate, domestic debt, budget deficit and domestic credit to. Similarly, 19 examined the relationship between finance and economic growth in nigeria from 19752008 and employed the bound test autoregressive distributed lag ardl approach. Determining the optimal public debt threshold for nigeria1 babatunde s. That the external public debts stocks have no positive impact on the economic growth of nigeria.
Determining the optimal public debt threshold for nigeria1. An empirical investigation was conducted using time series data on real gross domestic product, external debt stock, external debt payments and exchange rate from 19802012. The section iv and v deal with the research objective, models specification, sample size and sources of data and definitions of the related variables. The scope of this study shall cover the public debt trend of nigeria over the years to date. An empirical investigation was conducted using time. The study postulates that external debt does not contribute to the economic growth of nigeria. These perceived problems are being claimed to have caused a fast decline in the economic growth of nigeria. D department of accountancy, faculty of management sciences. Pdf the impact of external debt on economic growth. The scope of the study covers the period from 1985 to 2015.
This paper is intended to examine the domestic debt economic nexus in nigeria during such a fairly long time period as 1980 to 2015. The essence of public debt and public debt management why does government borrow. This study concluded that the resultant effects of external debt on economic development in nigeria are negative and significant. The section iii analyses the trends in public debt and economic growth.
Promoting economic growth in nigeria using time series analysis believed that the impact of monetary policy could be analyzed in terms of the behaviours of the intermediate targets of consumer price index and inflation rate in promoting economic growth in nigeria. The study set out to test for both a long run and causal relationship between external debt and economic growth in nigeria. Ajide1 this paper investigates the role of frazer economic freedom index on fdigrowth relationship over the period spanning 1980 through 2010 using annual time series data. Development strategy for nigeria moses akpobasah at a 2day nigeria meeting organized by the overseas development institute, london, 1617 june 2004 contact. Statement of the problem the issue of external debt in nigeria has become an immense status bestriding the main stream of international economy and politics. Nigeria public external debt 20082019 data 20202022.
Abraham nwankwo directorgeneral, debt management office, nigeria guest lecture presented at the university of nigeria, nsukka, may 31, 2011 i. Keywords macroeconomic, economic growth, investment, monetary policy and fiscal policy introduction. The models in this study was used to evaluate the developmental relationship between the independent variables and the dependent variables. Pdf this study examined the impact of public debt on economic development of nigeria using annual time series data spanning 1986 to 2014.
External debt, public investment, and growth in lowincome countries prepared by benedict clements, rina bhattacharya, and toan quoc nguyen1 authorized for distribution by sanjeev gupta december 2003 abstract this working paper should not be reported as representing views of the imf. Nigeria external debt growth appeared to gather pace somewhat in the final quarter of 2019, after quickening activity in both the agricultural and industrial sectors propped up. The variables used in the study were tested for stationarity using the augmented dickey fuller and philip perron test. Institutions a nation must be perceived as being politically stable before it can hope to increase investment in its economy education. Umoh introduction this article overviews the growth and development of the nigerian economy from inde pendence to present times. Regional development a nations comparative status in its region of the world will impact its ability to develop. This paper will examine specifically, the extent to which variations in nigeria debt structure contributed to the nations economic growth. This paper is set to contribute to the extant literature by investigating econometrically the existence or not of a longrun relationship between globalization and economic growth in. Analysis of external debt and economic growth in nigeria. Pdf foreign direct investment inflow, external debt and. An empirical analysis of the macroeconomic impact of.
This study set out to analyse the impact of external debt on economic growth of nigeria. In the light of this, this study assesses the impact of public debt on external reserve in nigeria. Genesis of nigeria external debt can be traced back to 1958 when it first subscribes. Pdf the impact of public debt on economic development of. The debt forgiveness saw nigerias total debt and external debt plummeting by. This thesis examines whether external debt affects the economic growth of selected heavily indebted poor african countries through the debt overhang and debt crowding out effect. Doguwa4 this paper investigates the existence of threshold effects in the relationship between public debt and economic growth in nigeria using quarterly data. The model built for the study proxy gross domestic.
This work evolved out of the zeal to provide an immense understanding of the nigeria economic of debt. Oct 26, 2017 this paper uses a structural vector autoregression generalized economic growth model augmented with a debt variable to characterize the dynamic impact of innovations to external public debttogdp ratio on per capita gdp growth, investment, trade openness, exchange rate and inflation in nigeria over the period 19702014. A multivariate regression approach was employed to estimate augmented growth models. In particular, the public debt servicetorevenue ratio is high, underlining the importance of mobilizing revenues. Anchored on the hypothetical launch pad that domestic debt has not significantly. Generally, we found empirical support for an inverted ushape relationship. In order to achieve the ultimate goal of sustainable economic growth, governments require substantial amount of capital finance through investment. Pdf does external debt promote economic growth in nigeria. The study make use of ordinary least square regression technique to draw out inferences on the relationship between external debt and economic growth. Expost facto research design was adopted for the study. Many empirical studies have investigated the effect of external debt on economic growth and development, some end up finding a negative impact on economic growth while others do not find any significant relationship between economic growth and external debt.
The impact of monetary policy on the economic growth of. The broad objective of this study was to evaluate the impact of external debt on the development of the nigeria economy within the lifespan of 19852011. External debt, economic growth, impulse response, variance. Download undergraduate projects topics and materials accounting, economics, education. In the 1960s, nigeria was on a par, in terms of aspirations to attain a very high level of economic growth and development, with its fellowoil producing and exporting countries such as malaysia and indonesia, but has since failed to keep pace with them. Pdf this research work was aimed at ascertaining the impact of external debt on economic growth in nigeria. The result of the chow test showed that the 2005 external debt relief caused a structural break in economic growth. A multivariate regression approach was employed to. External debt, economic growth and investment in nigeria. This paper is set to contribute to the extant literature by investigating econometrically the existence or not of a longrun relationship between globalization and economic growth in nigeria and more precisely the. Domestic debt and its impact on economic growth of nigeria 19802012 chapter one.
It is a popular saying that no man is an island on himself. Foreign debt management and the development of nigeria economy. Data for the study are collected from secondary sources. Gross domestic product, external debt services, external debt stock, external reserve, and exchange rate. The impact of external debt on economic growth in nigeria. Domestic debt and its impact on economic growth of nigeria. The relationship between external debt and economic growth. So also no government is an island on its own and as such it would require assistance and maybe in form of foreign aids, investment from foreigners and external debt so as to perform. Pdf the study examines the effect of external debt on the economic growth of nigeria. The nexus between external debt and economic growth in nigeria.
The impact of public debt on nigerian economy research. External debts, economic growth, autoregressive distributed lag, nigeria. Impact of external debt shocks on economic growth in nigeria. Nigeria external debt growth appeared to gather pace somewhat in the final quarter of 2019, after quickening activity in both the agricultural and industrial sectors propped up a modest expansion in the third quarter. Effects of public external debt and private investment on. Effect of external debt on nigerian economy munich personal. Evidence from granger causality tajudeen egbetunde department of economics and financial studies, fountain university, osogbo, nigeria abstract the paper examined the causal nexus betw een public debt and economic growth in nigeria between 1970 and 2010 using a vector autoregressive var. The study investigated the impact of external debt on economic growth in nigeria for the period 19802012. No doubt, governments borrow to fill the vacuum created by the fiscal gaps in the proposed expenditure and expected revenue within a fiscal period. Dec 16, 2015 domestic debt and its impact on economic growth of nigeria 19802012 chapter one.
Pdf the study examines whether external debt actually promotes economic growth in developing countries using nigeria as a case study. Malaysia in 1970, both hugely dependent on oil both recently gained independence from. Pdf impact of external debt on economic growth in nigeria. The paper examined the causal nexus between public debt and economic growth in nigeria between 1970 and 2010 using a vector autoregressive var. An empirical analysis of the macroeconomic impact of public. International journal of innovation and economic development, 25, pp. Impact of external debt shocks on economic growth in. Policy implications and poverty reduction in nigeria ochalibe, alexander ibu.
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